smallbusiness.co.uk: Helping your business think big

Four MDs from different regions and sectors in the UK reveal how they are coping with the soaring price of fuel

Ranjan Singh

CEO, isango! (retailer of ‘travel experiences’)

I’m an optimist. I believe oil prices will soften because of the slowing of the economies of the US and Western Europe, and high inflation in India and China. In the meantime, it’s true that people are putting off their fancy vacations to Australia or Costa Rica, but they are still taking holidays closer to home and we’re catering for that by strengthening our offerings in the UK and Europe. We’re analysing our customer data like mad to see how needs are changing and we need to be agile in our response. Of course, I would be stupid if I said the state of the economy won’t have an impact on us, but as we don’t sell flights or hotels; our revenues are less dependent on the things people are cutting down on.

Paul Delves

MD, Harry Tuffins (supermarket chain)

We reckon our cost of goods has gone up three or four per cent in eight months, while cost of services has gone up 25 to 30 per cent, mainly because of fuel costs. We can’t ask our customers to pay a lot more because they’ll go elsewhere. That means we’ll take a massive hit on our margins. It’s going to get worse too – the effect of the recent rise in oil prices on other commodities hasn’t been fully felt. Having said that, I’m confident that we can weather this. Last week our sales were up 14 per cent year-on-year, so people realise we’re still competitive. We’re also offering 10p a litre off fuel when you spend £60 in the store: that costs us a bit, but it gets people through the door.

Stewart Yates

CEO, TFM Networks (virtual network operator)

The single biggest expense, both for us as a company and our employees, is travelling. There’s not only the cost of the fuel, but the fact that time spent driving is not productive. We have one customer in Newcastle we send someone to see four times a year - we’re based in Buckinghamshire - which costs us £2,000 not counting the man-hours lost when the employee is driving. To reduce costs we’re installing videoconferencing systems for key clients, which involves a one-off expenditure of £250 and allows us to talk to them whenever we want. We’re also encouraging employees to work from home where possible to keep their costs down, while making sure we maintain a team environment by creating opportunities for staff to socialise.

Charlie Mullins

MD, Pimlico Plumbers (London-based plumbers)

We deal with 1,400 jobs a week, so we spend a lot on fuel. The most important system we have to minimise fuel costs is a tracker fitted to all vehicles that pinpoints where any plumber is and allows us to send him direct to the nearest job. We try and keep people inside their own areas. Another money-saving innovation is our material delivery service, which circles around different jobs and means engineers don’t have to leave their work to collect parts. We also have motorbikes to deliver small parts over long distances, and we’re looking at scooters with a built-in carrier that can take larger parts. We’ve always been aware of fuel costs but in the past month we’ve seen prices increase rapidly, so we’ve had to redouble our efforts.

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